PURCHASE AND SALE: CASES
Juta & Co v Rorich 1924
The publishing company Juta deliverd books to Rorich [a teacher] for sale to students. A list of prices was supplied and Rorich was to for all books that he had sold. Unsold books were to be returned. No time limit was set for this. Several unsold books were destroyed in a fire and Juta sued for the unsold books.
It was held that Rorich was a mere agent, no agreement of sale had taken place and risk had not passed to Rorich. A contract of sale is different from a contract of agency. It requires there must agreement by one party to sell and by the other to buy. In the absence of such agreement there is no sale.
Note: In the case of ‘disguised’ agreements the court would interpret the agreement for what it really is i.e. a contract of sale. This is what happened in Treasurer-General v Lippert [1881] where an agreement of sale was described as a contract of agency & surety in order to evade payment of transfer duty.
Theron Ltd [in liquidation] v Gross 1929. The liquidators sold book debts to Gross at an auction for £16 10s. The auctioneer exhibited a list of the debts but disclaimed any guarantee for its accuracy. Neither the liquidators nor Gross knew at the time that some of the debts totaling £38 7s 7d had already been collected by the liquidator’s agents. Gross sued the liquidators for that amount. The court ruled in favour of Gross and awarded him the full amount of £38 7s 7d even though had paid a lesser amount.
Principle: In general, a contract of sale for a nonexistent thing is void. But the company, by their own fault, had failed to inquire diligently into the matter. So they were “bound to deliver what they had sold.”
XAPA v NTSOKA 1919
A son–in-law pointed out some cattle and identified them by their markings to his father-in-law which constituted marriage dowry (lobola/roora). The cattle had not been collected at the time. It was held that the pointing out of the cattle constituted delivery by the long hand (traditio longa manu) which a fictitious form of delivery especially appropriate where the item is bulky or heavy making actual delivery difficult. Further, the court said “two genuinely contracting parties can adopt which form of delivery they please.” For this from of symbolic delivery there must be:
An intention to adopt that from of delivery
There must be pointing out in praesenti
Placing the item at the disposal of the buyer
Clear identification and ascertainment of the thing beyond any doubt.
POPPE, SCHUNHOFF & GUTTERY v MOSENTHAL & Co. 1879
The plaintiffs sold brandy to the defendants but before the brandy was set aside for the buyer (defendant), the government imposed a new excise duty on stocks of brandy in hand. The question was who should bear the cost of the new surcharge. The seller had paid duty and sought to recover this amount from the buyer. He had however not set it aside or marked or in any way appropriated it to the buyer. It was held that the seller bore the risk because the goods had not yet been set aside for the buyer. This was based on the principle that for “fungibles” – goods which have to be drawn from a larger stick of identical item- risk passes from the seller when such goods have been appropriated to the buyer.
Taylor &Co v Mackie, Dunn &Co 1879. The case is similar to above except that though delivery had not been made, the seller had in accordance with the contract measured off the brandy,, reduced its strength and placed it in casks marked with the buyer’s name before the duty was imposed.
Wilmot v Sutherland 1914
Two or three bundles of forage were placed on the ground beside a wagon load of forage, intended by Sutherland for sale on the public market and open to inspection by potential buyers. Having examined the bundles beside the wagon, Wilmot bought 200. But these subsequently proved to be musty & Wilmot therefore brought an action on the ground that the bulk did not correspond with the sample.
Wilmot was bound since this was not a sale by sample but mere puffing or commendation by acts or conduct. In such a case the maxim caveat emptor applies. Because the goods being sold could themselves be inspected and there was no evidence of fraud.
Elliot v McKillop 1902. An auctioneer was selling bricks “as a lot” not by number. He was however persuaded by the buyer to give an estimate of the number of bricks. The seller estimated there were 80 000. It turned out after the sale that there were 50 000 instead. It was held that the buyer was bound because he “got what he bought’ i.e. bricks in a kiln “as they stood”. The mere expression of an opinion is not a warranty but simply an estimate which if honestly held –as here- is not binding on the seller.
Vlotman v Landsberg, 1890 SC
A seller represented that a cow being sold voetstoots gave 14 bottles of milk per day when in fact it gave only two. The court held that the buyer was entitled to rescission plus damages. The discrepancy was too large and so it could not be an honest opinion or estimate. A seller is not entitled to willful concealment of a defect.
Goldblatt v Sweeney 1918. A buyer bought a car with a latent defect in the form of a welded crankshaft. He thoroughly overhauled the car in order to resell it. He then sought to rescind the contract. It was held that since he could not give restitutio in integrum , he was not entitled to actio redhibitoria but only to actio quanti minoris it was held that “the very object of redhibitory action is to put each party back to its original position before the sale ... reasonable wear and tear excepted”.
Holden &Co v Morton & Co 1917. A manufacturer sold tins which he knew were to be used for canning fruit. Some of these cans leaked. He was held liable under the implied warranty against latent defects. This warranty applies where are unfit for their ordinary purpose but also for their special purpose provided the seller knew of such purpose at the time of the sale.
SA Oil &Fat Industries Ltd v Park Rynie Whaling Co Ltd 1916. Buyer bought No.3 whale oil for soap making. After using some of the oil and not getting satisfactory results he tested some of the oil and found out that he had in fact receive a mixture of whale and sperm oil which was not suitable for soap making. He sought to cancel the contract. He was granted actio quanti minoris.
Marks Ltd v Loughton 1920. Loughton [the buyer] sought to rescind a sale of eggs which had been condemned and subsequently destroyed by the local authority as unfit for human consumption. He was granted actio redhibitoria even though he could not restore the eggs.
The general rule is that even where fraud is alleged the buyer must restore what was obtained under the contract. However, in this case after delivery “without any fault on the part of the purchaser the subject matter of the contract of sale has perished owing to the very defect complained of.”
African Organic Fertilisers & Associated Industries Ltd v Sieling 1949. Buyer sought to rescind a sale of kraal manure which proved unfit for a purpose the seller knew of at the time of the sale. However the manure had been had been used and so could not be returned.
The court distinguished this case from SA Oil &Fat Industries Ltd v Park Rynie Whaling Co Ltd 1916 where the buyer still had the commodity which could not be restored for the reason that it had been mixed with other ingredients but still having a market value. This case was ruled similar to Marks Ltd v Loughton 1920. “In the present case it is not a defect in the manure that has caused it to perish, but it is due to the defect in the manure that it was wasted, which is very much the same thing. In one case the article perishes through the defect. In the other [present] case the article perishes or is consumed by being used in the normal way as contemplated by the parties, but because of the defect it was useless and the buyer derived no benefit from it whatever.”
Similar cases to this are:
Platnauer v Morrison 1910 concerning defective seed potatoes and Montagu Co-operative Wines Ltd v Lewin 1912 concerning under strength wine. Neither could be returned but the buyers were able to recover the purchase price
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